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I did that once and NEVER again..! I had the money, but fell for the pitch. First off, you have to fill out a credit app and now you have another credit card you didn't want. I figured out how much it would cost per month to pay it off in 12 months and sent them that much every month, so it was paid off by the time the 12 months was up. If it isn't paid off in full by that time, they add all the interest back on, so you didn't really get it interest free.
Many people think they don't have to pay until the time limit is up, and they get nailed..
I paid mine off in time, and then canceled the CC they forced on me, and will never do such a foolish thing again. that's another trick to bury people in debt...

I like those deals, but you have to make payments immediately. If you used $5,000 with 24 months no-interest financing, you'd have to pay about $210 per month between now and then. Can you afford that? If you carry any balance at all beyond the grace period you might as well be putting it on your credit card. If you do it right, it's an interest-free loan.

I don't try to play the credit-score game. Just use credit responsibly and pay your bills and your score will take care of itself. With that said, I think it helps your score in the long run whenever you take on a loan and pay it off. It may hurt you in the near-term, so be careful if you're planning on buying a car or something soon, but in a year (maybe?) or at least by the time it's paid off it will add to your favorable credit history.

For example. If we can spend $300 per month, and it is 12 months no interest. We want to have the bill paid off in 10 months to avoid any odd hassles (first billing cycle starts late, leading to "on time" last payment resulting in 'late payment' and interest fees). So...$300/month X 10 months=$3000 for furniture!

We do the 10 payment thing too!

I always take advantage of these if they are offered when we need something.

Follow up final payment with phone call or check online to verify payment was received BEFORE any interest was charged. Allow yourself enough time to send another payment in if the first attempt wasn't received.

I did the zero percent balance transfer and/or new credit card account game for yeeeeears. I always paid on time if not early. Did't open unecessary accounts just for the zero percent option. My credit score is above 800.

As long as you're disciplined, you can make the most of it. Make absoultely sure you know when that zero percent interest period is up.

Some don't require regular payments - I've done this once for a "No payments, no interest for 12 months". Two weeks before the year was up, I walked into the store and paid it with my credit card. Points! Then paid the CC off 3 weeks later

They are good deals. It is safe to assume nothing you would buy with this has any residual value (you are not buying it to make money), so your goal is to minimize cost. Suppose you buy a $1000 TV and pay cash. That has a NPV of $1000. Now say you get a no interest card for 18 months, pay the minimum (say $25) for 17 months and pay the balance off in full in the 18th month (17 payments of $25 and one payment of $575). If you don't do anything with the extra money (keep it in an ING savings account at 1% interest) the NPV of that option is $869.77, so you save $130.23 on the cost of your TV by utilizing the 0% interest deal.

You just have to be disciplined enough to keep the money around working for you to pay in full in the last month.

All advice has been great. All I can reiterate is to make sure you have the money to pay off in full already sitting in the bank. This should be above and beyond your regular savings.

If you don't already have a 6 months emergency savings, I wouldn't do the deal. And if you do have that and you do the deal, make sure paying off the balance is added to your 6 months savings.

We did this with Home Depot a few years back when remodeling the kitchen. We had the money but did the deal anyway. DH also had a stable job - he thought. When he was laid off it was like being hit with a truck. After going through all that and the stress, etc., I'll have to say, I wouldn't do this type of deal again. That's just me though. Even though we had the money, mentally you sit there wishing you didn't have this one more thing when you have no income.

That being said, when I bought a duplex I needed a fridge. I used Sears' credit card with no payments for X months. Divided the purchase price over the X months and paid it in full with no interest. Winner!

Sears is betting that most people won't do that! Also, if you make the last payment even 1 day after the "deal date", they charge you the FULL 6 MONTHS OF INTEREST FOR THE 1 DAY LATE.

Yep...as I've said before in this forum, credit is a tool...one can use it wisely, or one can use it poorly.

Quote:

Originally Posted by Nayabone

that's another trick to bury people in debt...

It's not a "trick" - what it is is a tool for people who know how to manage their credit and their money. Anyone who gets boned by one of these deals (such as in the type of example you discussed) has not been "tricked", just financially ignorant.

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